Pascagoula's proposed tax hike requires city referendum

PASCAGOULA, Miss. -- The City of Pascagoula is holding a meeting to approve a potential millage hike, but there's a problem -- the proposed 14.45 mill increase can't be instituted unless approved by the voters in a citywide referendum.

According to state law, if a municipality proposes an ad valorem (property) millage increase, the revenues generated by said increase cannot exceed 10 percent of the ad valorem revenues generated in any of the previous three years.

Mississippi Code 27-39-321 states, "With respect to ad valorem taxes levied for each fiscal year, no political subdivision may levy ad valorem taxes in any fiscal year which would render in total receipts from all levies an amount more than the receipts from that source during any one (1) of the immediately preceding three (3) fiscal years, as determined by the levying governing authority, plus, at the option of the taxing authority, an increase not to exceed ten percent (10%) of such receipts."

The code includes exceptions to the 10 percent rule, but it does not appear Pascagoula would meet any of the requirements for those exceptions.

In Pascagoula, the current value of a mill is $232,500. The proposed millage increase of 14.45 would generate additional ad valorem revenues of $3,359,625.

That figure would represent a more than 33 percent increase over ad valorem revenues in any of the previous three years -- more than three times what's allowed under state law without a referendum.

The city is considering enacting a tax hike in the form of increasing millage rates from 42.05 to 56.50 mills because of the $14 million deficit facing the city.

The city, according to Assistant City Manager Frank Corder is operating with a projected revenue of $59 million -- $9.8 million of which is generated through ad valorem taxes.

Per Corder, the proposed budget for FY19 projects revenue of $51.4 million with $13 million to be financed through an ad valorem tax levy.

Comment from City officials was not immediately available Thursday afternoon.